Can You Hear Me Now?

The telematics revolution hardly makes a peep.

September 2002 By FRED M.H. GREGORY

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Remember Y2K? Remember before Y2K? It seems like a century ago, but those were the days: Anthrax was an obscure heavy-metal band, and Al Gore-remember Al Gore?-was busy inventing the Internet. Remember the Internet? It was going to change everything. Even the automobile, that old-tech fossil, would be chipped up, digitized, and wired into the World Wide Web.

Driving in the future, the Nostradamuses of the Internet Age foretold, would go something like this: You're stuck in morning traffic, sipping a latte. A voice materializes from the ether: "Dude, better get off at the next ramp. There's a toxic-waste spill ahead that's gonna shut down the slab big time. And check it out, Enron's up to 300-wanna sell?" As your digital deity guides you to work, it also helps you make a few Nasdaq trades, catch up on your e-mail, and reserve a table at Casa Maison. And soon you arrive at the office richer, wiser, and, like, totally prepared for another day of all-pro multitasking.

Telematics would make all this possible. What's telematics? It's a suitably techie-sounding word that describes the hard-, firm-, and software that permits communication between a car and driver and the rest of the universe. It was going to be the biggest thing to happen to cars since, well, the internal-combustion engine. "All cars will eventually be produced with some degree of embedded telematics systems," foretold a study by In-Stat/MDR, a high-tech market research firm in Scottsdale, Arizona. Better yet, telematics would generate anywhere from $46 billion to $100 billion in revenue by 2010, mused some auto-industry and financial experts cited in a Dow Jones Newswires story.

With that much money on the table, the players lined up to get into the game looked like a dream team of multinational corporations: the automakers, of course, but also Microsoft, AT&T, Motorola, Ericsson, and Sprint, to name a few, and even entertainment conglomerates such as Vivendi. They teamed up in various combinations-Ford and Qualcomm, Citroën/Peugeot and Vivendi, Volvo and Ericsson-and promised the moon. That was just a couple of years ago. So, where are the telematics?

So far, the only broadly available example of this convergence of old and new technology is General Motors' OnStar service, more of which later. But that's it. Ford and Qualcomm spent a reported $125 million on developing Wingcast, their version of OnStar, and promised it would be in every Ford product by the end of 2004. But in June 2002, Ford pulled the plug on the deal. Chrysler offers "U-Connect" this fall, a $299 option that makes hands-off cell-phone use easier. Mercedes' cars connect to the Web via their COMAND screens for stock quotes, news, and e-mail. And other automakers are either licensing OnStar or offering little more than optional global-positioning-system (GPS) navigation devices, which are fun to play with but aren't hundreds of times better than a two-dollar map, although that's the cost difference.

Somewhere between the 20th and 21st centuries, telematics slid into a black hole of circumstances unintended, unforeseen, unusual, and unfortunate.

The big killer was the economy-things were a lot rosier in 1991 than in 2002. Although auto sales have sailed along smoothly even in the wake of 9/11, they've been sustained by discounting, which has hammered down profits and left the automakers with little mad money to fritter away on high-tech flings such as telematics. The same goes for the suppliers who traditionally develop this kind of hardware. And as for some of the new-economy, e-commerce companies that were salivating over the potential of telematics, their interest seems to have diminished in proportion to their stock prices or swirled away down the tube with the dot-coms.

Another obstacle to broad use of telematics is concern about its impact on safety. The National Highway Traffic Safety Administration estimates that about 1.2 million accidents a year-about 25 to 30 percent of the total-involve some kind of driver distraction, everything from brushing teeth to eating Big Macs. Obviously, telematics is distracting to some degree, but how much? On skimpy information, New York State and some smaller jurisdictions passed laws banning hand-held cell-phone use while driving. It seemed like the beginning of a trend, but since then other states have held off from following suit pending further research.